The new financial year brings a key change in TDS (Tax Deducted at Source) rules. Form 15H for senior citizens and Form 15G for others have been replaced by a single Form 121 starting Apr. 1.
Until now, individuals below 60 years used Form 15G, while senior citizens relied on Form 15H to prevent TDS if their total income was below the taxable limit. This distinction has now been removed.
Form 121 will be used by all eligible taxpayers, regardless of age. Anyone whose total tax liability for the financial year 2026–27 is expected to be zero can submit this form to the payer and request that no TDS be deducted.
Types of income covered
Form 121 can be used for multiple income sources
Interest from bank deposits
Pension and provident fund withdrawals
Insurance commission
Rent
Dividend income
Income from mutual funds
Payments related to life insurance policies
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Who can use Form 121
The condition remains unchanged. The taxpayer's estimated total income for the year must fall within the basic exemption limit, resulting in no tax payable. Once the declaration is submitted, the payer (such as a bank or financial institution) will not deduct TDS on specified incomes.
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New requirements
The updated system introduces some extra reporting steps for payers. Each Form 121 declaration must be assigned a Unique Identification Number (UIN). This number will be 26 characters long and include:
A sequence number
The relevant tax year (for example, 202627 for FY 2026–27)
The payer's Tax Deduction and Collection Account Number (TAN)
Payers must also file quarterly statements with details of all declarations received, even in cases where no tax has been deducted.
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What changes for taxpayers
For most taxpayers, especially senior citizens, the main difference will be the shift to a new form. The purpose remains the same (preventing unnecessary TDS) but the format may require more detailed information such as PAN, estimated income, and possibly references to past tax filings.
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Another important point is timing. The declaration should be submitted at the start of the financial year. If it is not filed on time, TDS may still be deducted, and the taxpayer would then need to claim a refund while filing their income tax return.
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